AdSense Arbitrage Allowed In Google?

I’d like to note that this isn’t my original post. I wrote a long one and when I re-read it I realized that sometimes it isn’t worth calling companies out. Although this one is not as in your face, it is still relevant and applies to Merchants that are considering running AdSense and adding leaks to their sites. AdSense can be good for your sites when used properly, but you have to consider all channels including PPC, Affiliate, SEO, CSEs. Email, etc… and create solutions so that you don’t also shoot yourself in the foot and lose your customer base. Here is the revised article on Google possibly allowing some forms of AdSense Arbitrage.

Apparently Google may be allowing some companies to get away with Adsense Arbitrage, or something similar to AdSense Arbitrage. If you don’t remember what AdSense Arbitrage was, AdSense Arbitrage is when you build a site full of AdSense Ads or AdSense for Search pages with tons of links instead of content and information. You would then bid on cheap keywords in hopes that keywords with more expensive clicks would show up on your site. In theory you would then make more money then you were spending and it was a quick and easy profit for you and somewhat for Google. Then Google got smart and realized that this had a negative effect on their Advertisers and was a horrible user experience for the people looking for information and products. The reason they stopped it was that if landing pages for AdWords advertisers gave a bad user experience, end users would stop clicking on AdWords ads because they don’t trust them. This also would mean that Google would lose a huge source of revenue coming in. Instead of finding relevant information, end users were finding Arbitrage pages and get stuck in endless loops. The difference with what Google is doing now is that it is for Merchants to advertise Adsense on their sites. Google probably won’t allow people to develop endless loops or Arbitrage pages so it probably won’t be as bad as it was a few years ago. So what are the risks? Lets break it out by channels and then give some solutions.

Paid channels like PPC, CSEs and Media Buys or Remarketing.

If you are spending money to bring potential customers to your site, why would you put up leaks that would enable them to leave? Google says that you can start to monetize the traffic that may have not converted, but the reality is that you paid for these people to come to your site and now you are giving them exposure to your competitors. With Remarketing it gets even worse considering you possibly spent money to bring the person to your site, then you spent more money to bring them back again, and now you are giving them a reason to leave and shop with someone else for a cheap pay per click. Are your customers and sales really worth risking for a single click? You could be losing a lot of money off of your paid traffic by placing AdSense on your site. There are ways to work around this though.

Affiliate Marketing and Performance Based Channels.

Affiliates who are not reliant on specific Merchants may not promote you. Why would they send you their traffic when you are showing ads for other companies and making a case for their traffic to leave and them to lose a potential sale and commission? Affiliates who are not Merchant reliant can send their traffic to a competitor that doesn’t have leaks (Ads or links that lead off the Merchant site.). Affiliates can easily send their traffic to your competitors that don’t have leaks and feel more confident that their traffic will stay on the site and have a better shot at converting. The other risk you run by adding an ad network to your site is that sometimes certain unethical Affiliates may target your website using Google Placements and show ads for your site or coupons for your site directly on your site. They can advertise their own sites with coupon codes and then send them back to you with the code reducing your margins and causing you to have to pay out a commission as well. This would happen because you decided to try to get money from a few visitors clicking on AdSense links.

Email and Loosing Your Opt In List.

Here is one of the scariest things that could happen by a Merchant adding AdSense to their sites. Merchant’s could lose their Email opt-in list and user base by sending out a newsletter and bringing their customers back to their site. When the customer comes back to the site and finds the AdSense ads they now see other places to shop with similar offers and products. You are basically giving away your customer base and opt in newsletter list to your competitors. That is one of the dumbest things you could do, especially for hopes that they will click a link so you get paid once, instead of multiple sales from your newsletter list.

So what can you do if you want to reduce the risks of lost sales by including AdSense links and ads on your site?

If you still want to have AdSense ads on your site and don’t mind giving your customers over to your competitors, here are a few things you can do.

Only show ads when someone comes through a non paid channel.

Make sure that you add tracking urls to all of your paid channels. Set up redirects and include terms like Newsletter or CampaignID to the url. When the tracking parameter is recognized have your site show a version that does not have any AdSense ads on it. That way people who you paid to bring to your site or people who came from your Opt-in Email and Newsletter list won’t see your competitors ads on your site. The only people that will would be people who came through backlinks, SEO and non tracking TV, Print and Radio ads.

Show ads when people are leaving or after they make a purchase.

If you have to show AdSense ads on your site, do it where it won’t effect the shopping process. Put the ads on your confirmation pages or after they subscribe to your newsletter. If you are a single sale product or single item sale like an As Seen On TV Product or Insurance Lead, then once you have the conversion or lead you don’t have to worry as much about your competitors getting your traffic since you got the sale and conversion.

The reality is that although you can earn money from the clicks leaving through AdSense, you are also giving away your customers. If you paid to bring them to your site, subtract that from your earnings per click. If you have an Affiliate program consider the loss of content sites, newsletter drops and other non merchant reliant Affiliates which would have sent you traffic and sales. You also have to remember that adding AdSense ads to your sites is allowing your competitors to advertise directly in your store. If you would let them sell their own products in your brick and mortar shop, then go ahead and let them do it in your ecommerce store as well. I rarely recommend things like this for Merchants, but at the same time some Merchants can make it work for them. If you decide to add ads to your site, think about how it will effect your other channels and the potential loss of Affiliates, paid traffic and customers to your competitors from your Newsletter list.

Comments

While I agree with many of the points you make, the idea that you’re risking your opt in list is a bit laughable – consider this scenario:

I subscribe to a newsletter which offers tips and news about widgets. The content directs me to a site to read the complete article, where I am exposed to advertising for widgets (duh). Since the company sells widgets, and widget cases and other accessories, I am not surprised to see an ad for widget consulting services (something they don’t offer) When used carefully,adsense has an ad blocking feature that can be very effective at removing the competition from your site, leaving retargetted ads, and complimentary ads.
.-= Eric Schwarzer´s last blog ..schwarzer- Jack LaLanne died – Sad http-bitly-eIKyXs =-.

Thank you for your comments Eric but you are thinking as an Affiliate to an extent, not a Merchant. Your newsletter, or the one you described, generally provides news, ideas and articles. Many Merchant newsletters are about sales and not articles and information. Yours is fine to show ads to because you need the exposure to multiple sites and Merchants to make sales. For Merchants it is 100% different as they are about sales and customer retention, not sending their customers to competitors. The more a Merchant exposes their own customers to competing sites, the more chances for them to lose a customer or have to share that customer and possibly lose out on some sales. There is a big difference in your model vs. the Merchant sales model.

On the other hand, like you pointed out, if the ads are for a complimentary product and service that they don’t offer, that isn’t as bad of a thing. The thing you are missing is that many of the Merchants won’t know how to set it up properly to show complimentary and not competitive ads. That is where the problem is.